In a spatially heterogeneous environment, the rate at which individuals move among habitats affects whether selection favors phenotypic plasticity or genetic differentiation, with high dispersal rates favoring trait plasticity. Until now, in theoretical explorations of plasticity evolution, dispersal rate has been treated as a fixed, albeit probabilistic, characteristic of a population, raising the question of what happens when the propensity to disperse and trait plasticity are allowed to evolve jointly. We examined the effects of their joint evolution on selection for plasticity using an individual-based computer simulation model. In the model, the environment consisted of a linear gradient of 50 demes with dispersal occurring either before or after selection. Individuals consisted of loci whose phenotypic expression either are affected by the environment (plastic) or are not affected (nonplastic), plus a locus determining the propensity to disperse. When dispersal rate and trait plasticity evolve jointly, the system tends to dichotomous outcomes of either high trait plasticity and high dispersal, or low trait plasticity and low dispersal. The outcome strongly depended on starting conditions, with high trait plasticity and dispersal favored when the system started at high values for either trait plasticity or dispersal rate (or both). Adding a cost of plasticity tended to drive the system to genetic differentiation, although this effect also depended on initial conditions. Genetic linkage between trait plasticity loci and dispersal loci further enhanced this strong dichotomy in evolutionary outcomes. All of these effects depended on organismal life history pattern, and in particular whether selection occurred before or after dispersal. These results can explain why adaptive trait plasticity is less common than might be expected.